The Alabama Litigation Accountability Act: When Can I Expect Attorneys’ Fees?

Posted on May 15, 2009

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Pursuant to the Alabama Litigation Accountability Act, ALA CODE § 12-19-270 et seq. (“ALAA”), “in any civil action commenced or appealed in any court of record in [Alabama], the court shall award, as part of its judgment and in addition to any other costs otherwise assessed, reasonable attorneys’ fees and costs against any attorney or party, or both, who has brought a civil action, or asserted a claim therein, or interposed a defense, that a court determines to be without substantial justification, either in whole or part.”

As written, the ALAA appears to entitle a prevailing party an award of attorneys’ fees in any case where no substantial justification for a claim or defense asserted exists. As a practical matter, however, courts are unlikely to award attorneys fees unless there is a clear entitlement provided by contract or by statute. This is probably a function of the difficulty in defining a “substantial justification,” along with the reality that judges are elected and would rather not award attorneys’ fees against any party unless they feel they have no choice.

This reality was recently demonstrated in Mahoney v. Loma Alta Property Owners Assoc., Inc., No. 2080192 (Ala. Civ. App. March 27, 2009). In Mahoney, the defendant appealed from a circuit court judgment denying her request for an attorney’s fee and costs pursuant to the ALAA when she was sued for several claims related to a property that she did not own, and as a result had been improperly named as a defendant. The Alabama Court of Civil Appeals found that the defendant was clearly entitled to relief under the ALAA, and the issue was remanded to the circuit court to make a determination of an appropriate award.

Mahoney is an important case from the standpoint of a party that has been targeted by a frivolous lawsuit or defense. In the event that a circuit court fails to step out on an apparent limb and award attorneys’ fees to the subject of a claim or defense without a substantial justification, it is reassuring to know that our appellate courts may still make such an award. As a practical matter, however, the ALAA appears to be applicable to cases such as Mahoney, where it is completely obvious that no substantial justification exists, i.e., where there is no question that the wrong party was targeted by a claim.

Brice Johnston, Goodrich Law Firm, LLC

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